Mayweather and Khaled were charged with violating federal securities laws that require promoters of investment offerings to reveal whether they had been paid to do so. Both allegedly failed to disclose payments they’d receive to hawk an initial coin offering (ICO) facing SEC scrutiny.

ADVERTISEMENT

Mayweather and Khaled were allegedly paid $100,000 and $50,000 each to endorse an initial coin offering from Centra Tech, according to the SEC. Both agreed to forfeit those payments to the government with interest without admitting to the charges.

Khaled also agreed to pay a $100,000 penalty, while Mayweather agreed to pay $300,000 for allegedly promoting two other investment products. Khaled agreed to refrain from hawking investment offerings for two years, while Mayweather accepted a three-year ban.

"These cases highlight the importance of full disclosure to investors," said SEC enforcement division co-director Stephanie Avakian. "With no disclosure about the payments, Mayweather and Khaled's ICO promotions may have appeared to be unbiased, rather than paid endorsements."The SEC in April arrested and charged Centra co-founders Sohrab “Sam” Sharma and Robert Farkas with several counts of fraud after allegedly duping investors through an ICO. Sharma and Farkas, through Centra, offered unregistered investments in the company through the sale of CTR virtual tokens, a cryptocurrency akin to bitcoin, Ethereum and other digital coins.Centra also paid celebrities, including Mayweather and Khaled, to promote the offering on social media.

"Investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements," said enforcement division co-director Steven Peikin.